Grand Banks Yachts Swings Back into Black
The builder of luxury yachts Grand Banks Yachts swung to a net profit of $1.2 million for the first quarter ended Sept 30 compared to a net loss of $1.3 million for the year-ago period.
Following restructuring efforts after a major acquisition, gross profit margin increased to 24.5% from 9.5% a year ago.
The SGX Mainboard-listed builder yachts said net profit rose after introducing initiatives to integrate design, production and marketing following the acquisition of Palm Beach Motor Yacht Co of Australia, which was completed on Aug 1, 2014.
Since the acquisition, the Group has aligned production between facilities in Malaysia and Australia. The Group migrated production of certain Palm Beach models to Malaysia where costs are lower. It also streamlined operations, increased training and introduced new boat-building equipment.
It also adopted a factory-direct sales model in North America, which has not only delivered a better customer experience but also significantly lowered distribution costs.
The Group's gross profit also benefited from the strengthening of the U.S. dollar – the currency in which at least half of the Group's boat sales are denominated – against the Australian dollar and Malaysian ringgit.
Commenting on the results, Mark Richards, Chief Executive Officer of Grand Banks, said, “Having completed the bulk of our integration initiatives, we have built a new foundation to strengthen design, production, communication, and internal efficiencies.”